By Labour ACC spokesperson Ruth Dyson.
Twenty-five years ago, ACC started in New Zealand. It was hailed as a major breakthrough in the delivery of medical
treatment and compensation for people who had suffered an injury. For the first time, non-earners (predominantly then
and still now, women and children) received access to medical treatment. The extension of the previous "Workers'
Compensation" to all New Zealanders was internationally acclaimed. Twenty-five years on, National has reverted to a
private insurance model for Workers' Compensation. Labour has committed itself to rebuilding ACC in a single public fund
model.
Some employers believe that private insurance is better because this year they have saved money. Sadly, that "saving"
stands up to little scrutiny. I have looked at many such "savings" and the figures just don't add up. To compare last
year's ACC levy with this year's private insurance levy is nonsensical. It is comparing apples with pears. To this
year's private insurance levy, you must add on the residual claims levy (which employers are still paying - but paying
separately, to ACC). You must deduct the experience-rating rebate, which you received back from ACC last month. You must
calculate the health & safety provisions which you may now be purchasing separately or funding yourself internally. If you are paying about
50% of last year's ACC levy, then you are about breaking even.
But Labour's policy is by no means a defence of the appalling practices of ACC and certain Ministers of ACC. We
certainly do not intend to return to the frustrations that everyone has felt about ACC. We have 25 years experience to
learn from and in rebuilding ACC we have ensured that the mistakes of the past are removed and that the innovations over
that time are captured.
That's why in both the structure and the policy, ACC will be new and different. It will be accountable and efficient.
ACC was originally designed to promote injury prevention as its number one goal. Clearly, neither the legislation nor
the policy reflected that. Injury prevention will be the number one responsibility of the Corporation. The Board will be
contracted (in the same way the Reserve Bank Governor is contracted to inflation targets) to ensure that delivery injury
prevention programmes are delivered. Where an industry has a high quality safety and health programme operating, it will
be supported to continue that programme.
The conflicting roles in OSH between education and prosecution will be removed. Education will be moved into ACC so that
if an employer wants help, they will be able to go to ACC without fear of investigation or prosecution.
Employers' levies will be reduced on the basis of their improved health and safety practices. Currently, employers are
experience rated. While this has focussed the minds of some employers on the cost of accidents, it has not in fact
reduced the number of accidents. Experience rating also encourages under reporting or transfer of work accidents to
non-work accidents, it encourages litigation (which delays rehabilitation), and it penalises employers who may have done
everything to reduce injuries.
I visited a plant recently which has a comprehensive health and safety programme operating. They have not had injuries
in the workplace - until one of their staff tripped on the stairs, resulting in serious injuries. The employer is now
penalised for that. So where is the incentive for continuing with the health and safety programme? Our alternative to
experience rating will encourage reporting of injuries, raise the health and safety standards in our workplace and
financially reward employers for their efforts.
The second function of the Corporation will be rehabilitation. Like injury prevention, this has been almost completely
ignored by ACC until recent times. Rehabilitation must begin as soon as practicable after an accident or injury. "Return
to work" -either in the original job or in alternative duties - is the aim. ACC is not a higher income alternative to
the unemployment benefit and therefore early intervention, active case management and stable relationships with
employers will be the driving force of the rehabilitation procedures.
With the move to privatisation of the workers' compensation scheme, the accredited employer and the approved employer
programmes have both been scrapped. Labour will reinstate these programmes. They have been very successful in involving
employers and unions in the rehabilitation process. Many large employers have developed comprehensive systems, which
ensure that their staff receive security of income when off work, regardless of the cause of them being off work (i.e.
illness or injury). These improved benefits have developed with employer/employee co-operation but have now been
scrapped. They should be allowed to continue and will be, under Labour.
ACC must not be able to incur an unfunded liability in the way that it has over the past few years. In the Independent
Newspaper, (6th October), Christopher Ryan of the Insurance Council said that Labour's move to remove private insurance
companies would leave claims of up to 30 years duration with no premiums being collected to fund them. In other words,
he has revealed that the private insurance companies are not running a fully funded scheme. They have returned to the
pay as you go scheme which has caused us so many problems in the past!
Labour will be operating a partial funding/legislated reserves scheme to ensure that these liabilities do not mount up
again.
The cost savings with an efficiently managed scheme are huge. For every dollar which is put into rehabilitation, $4 can
be saved. We will not need the massive regulatory and monitoring framework required under the private insurance model.
In the new Accident Insurance Act, there are 14 new employer taxes - including the "non-compliers fund" - a fund to
cover the costs for injuries to staff whose employer has not paid up. So employers are required to cover the costs of
employers who don't pay their insurance!
The move to private insurance is a move back to the system which was thrown out by New Zealanders many years ago -
pre-ACC and pre Workers' Compensation days. It was thrown out then because it was too expensive, too litigious, and was
not improving health and safety in the workplace. International experiences have confirmed the problems with such
privatised schemes.
Labour wants value for money for all stakeholders in the rebuilt ACC.